How Will RFS Decision Affect the Biofuel Industry?
December 7, 2015
By
The EPA's Renewable Fuel Standard decision is either a step forward or backward, depending on your point of view.
The Environmental Protection Agency announced Nov. 30 it is setting the total renewable fuel volume at 18 billion gallons for 2016, up from the proposal of 17.4 billion made earlier this year, but down from the 22.25 billion gallons in statue.
Timothy Rudnicki, Minnesota Bio-Fuels Association executive director, said his crystal ball is foggy on the effect of the decision on the biofuels industry.
"But to me it sends the wrong signal," he said. "It sends a negative message, and that is you can't count on the law upon which to build the infrastructure or the production capacity because it will be ... it can be lowered to accommodate the petroleum interest."
The American Fuel and Petrochemical Manufacturers issued a statement saying the decision is "an attempt by EPA to placate the biofuels lobby."
The Renewable Fuel Standard began in 2006 after being enacted through the Energy Policy Act of 2005. The RFS requirements were modified through the Energy Independence and Security Act of 2007.
Ethanol production in the United States has jumped from 6.5 billion gallons in 2007 to 14.3 billion gallons in 2014 and biodiesel production has grown from 0.5 billion gallons to 1.46 billion gallons during the same time period, according to the Energy Information Administration.
In their executive summary, the EPA said "while some stakeholders commented that reductions from the statutory targets would lead to a stagnation in growth, we disagree with this view.
"We proposed a 2016 volume requirement for total renewable fuel that was 1.1 billion gallons greater than the proposed 2015 volume requirement — a significant level of growth in one year," the summary reads.
Rudnicki said it's interesting the EPA, in their executive summary, writes "renewable fuels represent an opportunity for the U.S. to move away from fossil fuels towards a set of lower GHG transportation fuels and a chance for a still-developing low GHG technology sector to grow."
The RFS has been about energy security and reducing greenhouse gas emissions since its inception, Rudnicki said. It's good for the country, consumers, the environment and the economy. A study recently found 18,600-plus jobs in Minnesota are supported by the biofuels industry.
"If the petroleum industry just accepted the RFS — we know the production capacity is there — we could be exceeding where we're at today in terms of greenhouse gas reduction," he said.
The way the RFS stands now, it's hard to plan as the targets keep changing.
"For the EPA to have tinkered with the RFS and the renewable volume obligations was a big mistake," Rudnicki said. "It's like a slippery slope. Will it be changed next year? Will they find some reason to change the rule they've already set?"
The American Fuel and Petrochemical Manufacturers hope for change.
"Today's rule is further proof that the RFS program is irreparably broken and that the only solution is for Congress to repeal it outright," AFPM president Chet Thompson said in a statement.
Read the original story: How Will RFS Decision Affect the Biofuel Industry?
Global Biofuels and Biotech Industries Unite in Call for Stronger Biofuels Policies to Help in Fight Against Climate Change
Global Renewable Fuel Alliance
December 4, 2015
Press Release
Today, global transport emission have increased to 14% of the world’s greenhouse gas emissions and about a quarter of the total energy-related CO2 emissions. With the UN’s Intergovernmental Panel on Climate Change (IPCC) predicting that transport emissions could double by 2050, the need for preventative policy measures by world leaders is clear and urgent. According to the IPCC, transport’s growing emissions could be cut by 15-40% through “aggressive and sustained” policy measures, including reducing carbon intensity of fuels by substituting oil-based products with biofuels.
According to the International Energy Agency, by 2050, biofuels could provide 27% of the world’s total transport fuel and avoid around 2.1 gigatonnes of CO2 emissions per year, with biofuels eventually providing 23% of total emissions reductions in the transport sector. Sustainable biofuels, such as ethanol, can be used in existing vehicle fleet to reduce greenhouse gas emissions by 40-90% compared to fossil fuels and must be considered an important part of the toolkit to decarbonize transport.
Policies mandating the use of biofuels are now in place in around 64 countries worldwide and, in their Intended National Determined Contributions (INDC) plans, 36 countries that are attending December’s climate talks in Paris have highlighted biofuels use as a key component of their national climate action policies.
Biofuels are a key driver of clean technology innovation and a key part of the global agricultural complex, helping to reduce emissions, facilitating rural development and supporting food production, particularly in poorer regions. Further deployment of biofuels could help drive investment in low carbon technology and in agriculture, increase productivity, create new employment in rural areas, reduce our global reliance on crude oil and provide a stepping stone towards a genuine bio economy.
Representing over 330 biofuels and industrial biotechnology companies that are responsible for 90% of the world’s biofuels production, we reiterate our commitment to producing biofuels sustainably and call on the parties to the UNFCCC to acknowledge the benefits of sustainable biofuels and their contribution towards climate change mitigation and the reduction of greenhouse gas from transport.
We call on world leaders to support a global target for replacing at least 15% of the world’s total oil use in transport with sustainable biofuels by 2030, with a significant presence of advanced biofuels.
See original press release: Global Biofuels and Biotech Industries Unite in Call for Stronger Biofuels Policies to Help in Fight Against Climate Change
Construction Begins On Renewable Chemicals Facility In Little Falls
December 2, 2015
By Sam Schaust
Renewable chemicals company Green Biologics announced the start of construction on its 100 percent renewable chemicals manufacturing facility in Little Falls.
The site, which is being repurposed from a 21 million gallon per year ethanol plant, is said to be the first modern commercial plant in the U.S. to produce bio-based n-butanol and acetone—components used in paints, coatings, cleaning supplies and cosmetics.
Gahanna, Ohio-based Green Biologics purchased the site from The Central MN Ethanol Cooperative in December 2014. Green Biologics said it would spend a total of $76 million between the acquisition and updating of the Little Falls facility.
The company is scheduled to begin commercial production in 2016.
Read the original story: Construction Begins On Renewable Chemical Facility in Little Falls
Work to Keep Renewable Fuel Standards High
December 3, 2015
Staff Editorial
Kudos to the Environmental Protection Agency and Obama administration for increasing preliminary Renewable Fuel Standards, but the new standard still misses the mark.
Renewable Fuel Standards — how much biofuel will be produced and blended with traditional gasoline — were initially set by Congress in 2005 and expanded and updated as part of the 2007 Energy Independence and Security Act. The 2007 requirements called for a total of 22.25 billion gallons of biofuels to be produced and distributed in 2016. Targets recently released by the EPA reduced that output to 18.11 billion gallons.
Congress had called for corn-based ethanol to make up 15 billion gallons of the total biofuel output in 2016. Yet the newly announced EPA requirements limit corn-based ethanol to only 14.5 billion gallons. The lower standard is bad for Iowa and for the environment.
Iowa’s cornfields provide one third of the nation’s ethanol. An estimated 47,000 of Iowa’s jobs are in the ethanol industry. Yet, economic self-preservation is only part of the reason we support biofuels, and the higher RFS standard.
In the 10 years that the RFS has been in existence, oil imports have been cut by one third — the equivalent of taking 8.4 million cars from the road. That is no small feat. Lessening our dependence on foreign oil moves the nation forward in the way Congress intended, and in a way we all can agree is needed.
No one would argue that corn-based ethanol is the perfect, permanent solution to energy independence, but the creation of a stable market for renewable fuels, including ethanol, is a critical bridge to the increasingly clean, sustainable energy solutions of the future.
The research and innovation happening now is due in large part to the government mandates that have been a part of the RFS. Guaranteed demand for biofuels calms the marketplace, enables necessary infrastructure and encourages investment and expansion.
The delays, uncertainty and target fluctuations that have plagued EPA’s oversight hinder this forward progress.
Farmers in Iowa and other grain-producing states, as well as investors in renewable energy, need clear and consistent standards.
We encourage federal lawmakers to push for the biofuel benchmarks they created. If the EPA is unwilling to keep on course, Congress needs to regain control of the wheel.
Read the original story: Work to Keep Renewable Fuel Standards High
Now That the Dust Has Settled: What Did the EPA Miss?
By Timothy J Rudnicki, Esq
Despite EPA’s proclamation that it considered many public comments regarding the proposal to lower the Renewable Volume Obligation numbers, the Agency somehow missed the most important comment: enforce the law.
Based on the final rule, it seems the EPA also missed a few other critical public policy and environmental factors. In the 202 page final rule, the EPA reminds us “The fundamental objective of the RFS provisions under the CAA is clear: to increase the use of renewable fuels in the U.S. transportation system every year through at least 2022 in order to reduce greenhouse gases (GHGs) and increase energy security.”
And the executive summary to the final rule goes on to state “Renewable fuels represent an opportunity for the U.S. to move away from fossil fuels towards a set of lower GHG transportation fuels, and a chance for a still-developing low GHG technology sector to grow. These lower GHG renewable fuels include corn starch ethanol....”
In short, the EPA affirms that ethanol, whether conventional or advanced, is a lower GHG transportation fuel. The obvious conclusion which should follow from the EPA restatement of the RFS purpose and the unequivocal statutory volumes is straightforward: (A) enforce the volume numbers to send a message of certainty to biofuel producers so they can continue to grow the sector and (B) push the petroleum industry to give consumers more biofuel options so as to reduce GHG emissions now.
The final volume numbers, without doing a RIN analysis, look like 10% of the actual and projected overall growth for gasoline consumption. While some debate whether the EPA actually did push through the mythical blendwall, we should not loose sight of the fact the actual consumption capacity for biofuels (E85 for Flex Fuel Vehicles, E10 and E15 for 2001 and newer vehicles) with the current fuel dispensing infrastructure is well above 27 billion gallons. In other words, the 15 billion gallon number for conventional biofuels is indeed feasible. For details on the consumption capacity issue, see the EPA reference to the Energy Information Administration in the Federal Register at 33128.
The intent of the RFS is indeed to stimulate and drive change, a move toward greater use of renewable biofuels. In a Nation that has been dominated by petroleum and consumers’ limited access to biofuels for many decades, the RFS provides some modicum of certainty for those who are responsible for making biofuel production investment decisions and giving consumers greater access to renewable biofuels.
Unfortunately, the EPA missed the obvious. The Agency failed to comply with and enforce the black letter law and has thereby put off greater systemic change for another day. Given the clear purpose, intent and demonstrated effectiveness of the RFS thus far, the EPA decision also sends the wrong message to conferees at the Paris Climate Convention as well as investors, the environmental community, those diligently working to tamp down GHG emissions and the petroleum industry.
Digging into the numbers a bit further, we find the RFS set unequivocal volumes for renewable biofuels (conventional and advanced) to be used starting in 2006 and extending out to the year 2022. The total renewable fuel level set in law for 2014 is 18.15 billion gallons which includes at least 14.4 billion gallons as conventional biofuel. Since 2014 is history and RINs have been generated, EPA set the number at 13.61 billion gallons.
While 2015 is not yet history, according to the EIA the overall consumption of gasoline is up. The RFS explicitly calls for 20.5 billion gallons of biofuel to be used with at least 15 billion gallons as conventional. Instead, the EPA set the conventional number at 14.05 billion gallons, essentially mirroring 10% of the overall increase in gasoline consumption. If gasoline consumption were to drop below projections, would the EPA enforce the final rule or find some reason to adjust the number down to once again accommodate the petroleum industry?
Finally, for 2016, the RFS states the number of gallons of renewable fuel to be used is 22.25 billion with at least 15 billion gallons of conventional biofuel. In place of the statutory provision, the EPA used its version of the biofuel future by setting the number at 14.5 billion gallons.
When one considers the history and legislative intent behind the RFS, the EPA’s final rule flies in the face of the law and sets another dangerous precedent. In 2005, the Energy Policy Act (RFS1) put key stakeholders on notice that renewable biofuels were to have more space in the transportation fuel market. Then, in 2007, RFS2 provided a second explicit notice and clear requirements along with methods by which affected parties could comply with the statute. Biofuel producers responded by committing financial and logistic investments to make the production capacity available. On the other hand, the petroleum industry clung to the habits of the past buying RINs rather than facilitating greater consumer access to E15 and higher blends.
It will take some more time to fully assess the immediate implications of the EPA’s backsliding. Meanwhile, a few preliminary observations can be made at this time. The EPA missed the obvious purpose, intent and statutory provisions in the law. Consequently, the EPA missed the opportunity to send a signal to the petroleum industry: consumers can indeed expect more biofuel options at the fuel dispensers and the industry must comply with the law.
Finally, the EPA missed a rare opportunity to stick to the law, as the RFS was written by Congress years ago, for President Obama to present to the Paris Climate Conference. The RFS should still be held up as one of the most constructive and effective models for what can be done to reduce GHG emissions from the millions of vehicles that are, and will be, part of the rolling stock for many years to come.
Despite the EPA decision, we will continue to stand strong together and find ways to push past the EPA’s failure to fully enforce the RFS. We will find creative ways to deploy the USDA Biofuel Infrastructure Partnership and the Minnesota E15 Dispenser grant programs to help fuel retailers give consumers greater access to more biofuel options. Through these actions we will build increased energy security, continue to boost the economy and further reduce GHG emissions.
COP 21 Important Opportunity for World Leaders to Support Biofuels
Global Renewable Fuels Alliance
December 2, 2015
Press Release
Today, Bliss Baker, the President of the Global Renewable Fuels Alliance (GRFA), called upon world leaders participating in the United Nations Climate Change Conference (COP 21) in Paris to signal their support for biofuels as one of the tools to fight climate change.
“This conference is a real opportunity for world leaders to recognize the role that renewable fuels have played, and will continue to play, in the transition to a low-carbon global economy,” Baker said. “The climate problem is accelerating and biofuels represent one of the most cost-effective solutions to reduce oil use and greenhouse gas emissions from transport in the short and medium term,” he added.
The National Oceanic and Atmospheric Administration (NOAA) has said that October 2015 was the hottest October on record by a third of a degree making it the most above-normal month since records began being kept in 1880. This was the eighth month this year when a heat record was set, representing a record number of broken records in any year.
So far, 36 countries have already recognized the opportunity presented by biofuels in reducing GHG emissions and combating climate change, and have included them in their Intended Nationally Determined Contributions (INDC) plans. Studies have shown that most biofuels, like ethanol, are proven to reduce harmful GHGs from 40% to 90% compared to fossil fuels around the world.
“Given the significant contribution biofuel is making in reducing global GHG emissions today, we believe COP 21 participants should call for an increase in biofuel use through the introduction of supportive policies, particularly for advanced biofuels,” concluded Baker.
Read the original release: COP 21 Important Opportunity for World Leaders to Support Biofuels as One of the Solutions to Mitigate Climate Change
Misleading About Ethanol
The Barre Montpelier Times Argus
December 1, 2015
By Brooke Coleman
In “Ethanol is a bad deal for Vt.” (online Nov. 21), a group called the American Council for Capital Formation argues that ethanol is a bad deal for Vermonters economically and environmentally.
The allegations sound compelling, but Vermonters need to understand that these arguments are coming from oil-funded groups and lack basis in fact.
There is no better example than this one. The American Council for Capital Formation is funded by Exxon Mobil and Halliburton, among others. It is no coincidence that it spends much of its time smearing ethanol, the oil industry’s biggest competitor and political nemesis.
You have to give the group credit for trying to make absurd arguments look good. It argues that using ethanol transfers wealth to the American Midwest, where most ethanol is made. But Midwest ethanol is an alternative to Middle Eastern oil. So Vermont, the choice is yours.
The group attacks ethanol environmentally based on “independent” analysis. But the “University of Tennessee” study mentioned was funded by the ACCF. Oil companies also sponsored the “Princeton University” work they mention, and the negative ethanol polling.
Meanwhile, actual independent analysis from the Environmental Protection Agency, the California Air Resources Board and the Department of Energy confirms that using more ethanol and other biofuels reduces climate change emissions without significant land use impacts. The idea that ethanol increases gas prices is also preposterous, as the fuel has been up to $1 cheaper than gasoline per gallon for years.
The oil industry is smart. It invents creative arguments, pays for rigged research and pushes bad polling, then finds front groups to deliver it to unsuspecting Americans too busy to verify. Decide for yourself on ethanol. But check your sources, because these oil groups do not have Vermont interests at heart.
Read the original story: Misleading About Ethanol
EPA Sets 2016 Blending Targets for Ethanol and Other Biofuels
November 30, 2015
By Dave Shaffer
More biofuel will be required to be blended into the nation's fuel supply next year, but the ethanol industry isn't entirely happy about it.
The U.S. Environmental Protection Agency (EPA) on Monday issued final blending requirements under a 2007 renewable fuels law, ordering distributors to mix 8 billion gallons of ethanol, biodiesel and other advanced biofuels into the nation's fuel supply next year.
For the first time, the overall U.S. mandate for corn-based ethanol — about 14.5 billion gallons — will exceed 10 percent of the nation's expected gasoline use. That's intended to spur expansion of higher ethanol blends, such as 15 percent ethanol, or E15, which is now sold at just 36 Minnesota stations.
Almost all regular gasoline in the nation is a 10 percent ethanol blend, and that won't change.
For the ethanol industry, this overall market share has been called the "blend wall" — a barrier to selling more biofuel.
"We have seen a break in the blend wall," said Jeff Broin, chief executive of Poet Inc., the nation's second-largest ethanol producer with four plants in Minnesota.
Broin, who also is chairman of Growth Energy, an ethanol trade group, said the EPA's decision "should move renewable fuels forward." On a conference call, Broin said about 5,000 U.S. fuel stations are on track to install equipment to dispense E15, and he expects the higher-ethanol blend to sell at a discount to regular gasoline. In Minnesota, E15 typically sells for about 10 cents less than unleaded regular.
The 2016 corn-ethanol level is below the 15 billion gallons envisioned in the 2007 law — and is about 1 billion gallons less than the annual capacity of the nation's 212 ethanol plants.
Other ethanol industry leaders and supporters criticized the EPA's decision. The Minnesota Corn Growers called it a "step backward" and the Minnesota Biofuels Association, a state trade group, called it "capitulation to the oil industry" — echoing similar comments from the Renewable Fuels Association, an ethanol trade group based in Washington.
Sen. Al Franken, D-Minn., said the EPA biofuel targets are too low, even though they are higher than the agency proposed earlier this year. "[W]hile I'm glad they raised levels from what was proposed, these final numbers just don't cut it — especially for ethanol," Franken said in a statement.
Oil industry groups, which have fought expanding market share of ethanol, also were critical. "This decision is hard to view as anything other than an attempt by EPA to placate the biofuels lobby," said Chet Thompson, president of the American Fuel & Petrochemical Manufacturers.
Minnesota has 21 corn-ethanol plants, although two are shifting production to other corn-based biochemicals or fuel. Tim Rudnicki, executive director of the Minnesota Biofuels Association, said it's too early to say what effect the EPA decision will have on the state's ethanol industry, but "It certainly seems like a negative to me," he said.
Aside from corn-ethanol, the EPA also set higher blending levels for biodiesel, or diesel fuel made from plants, and advanced biofuels. Janet McCabe, acting assistant administrator for EPA's Office of Air and Radiation, said the rule increases the advanced biofuel blending requirement by 35 percent, but recognizes that cellulosic, ethanol technology hasn't developed as quickly as envisioned by the 2007 law. Cellulosic ethanol has a lower carbon footprint than the corn-based fuel.
Three cellulosic ethanol plants have opened in the past 14 months, including two in Iowa that process non-kernel parts of corn usually left on fields. A third plant in Kansas is owned by Spain-based Abengoa, which has begun insolvency proceedings, said Scott Chabina, a director at New York-based Carl Marks Advisory Group who tracks the industry.
Chabina said the EPA cellulosic ethanol targets could help spur investment in cellulosic ethanol, but that it won't be easy.
Read the original story: EPA Sets 2016 Blending Targets for Ethanol and Other Biofuels
Renewable Fuel Associations Express Mixed Reactions To Final Rule
November 30, 2015
By Sue Retka-Schill and Holly Jessen
Positive aspects were found in the U.S. EPA’s final rule establishing the renewable volume obligations (RVO) for compliance with the renewable fuel standard (RFS), but the overall tone from industry associations responding immediately after the EPA announcement was negative.
Growth Energy co-chairs Jeff Broin and Tom Buis emphasized the progress made in piercing the blend wall. The initial proposal two years ago went backwards, Buis pointed out, and the revised proposal in May was an improvement, but still below a 10 percent blend. The final rule will push that over 10 percent.
But while pleased that the blend wall was pierced, Broin said the methodology is still troubling. “We remain concerned that the final rule continues to rely on the ‘distribution waiver’ that redefines supply as demand and was rejected by Congress when the RFS was enacted into law. Of particular concern is that by using such a waiver, the oil industry is being rewarded for its unwillingness to follow the law and invest in infrastructure to move toward cleaner, renewable fuel, which sets a dangerous precedent for the future of the program.”
The Renewable Fuels Association was more direct in expressing its displeasure. “EPA’s decision today turns our nation’s most successful energy policy on its head,” Renewable Fuels Association president and CEO Bob Dinneen said in a statement. The agency increased the blending requirements for 2016 across the board, to a total of 18.1 billion gallons, including 14.5 billion gallons of undifferentiated biofuels or corn ethanol and 230 million gallons of cellulosic ethanol.
The RFA criticized the numbers being lowered from the 15 billion specified in the law. “Data shows that EPA, in its initial RFS proposal, understated the likely market for E85 and non-ethanol conventional biofuels in 2016 by at least 440 million gallons. The data suggests there will be at least 14.7 billion gallons of undifferentiated renewable fuel blended next year. With approximately 2 billion surplus RIN credits already available for refiners to use for compliance in 2016, and with another 900 million RINs potentially becoming available from 2015 over-compliance, the EPA’s decision to lower the 2016 RVO below the statutorily imposed level of 15 billion gallons is simply unnecessary.”
Brian Jennings, the executive vice president of the American Coalition for Ethanol, called the methodology for setting blending targets for 2015 and 2016 legally questionable. “When Congress enacted the renewable fuel standard it voted to side with those of us who said ‘yes we can’ reduce greenhouse gas emissions from motor fuel, ‘yes we can’ allow consumer access to E15 and flex fuels, and ‘yes we can’ spark innovative ways to produce cleaner fuels,” said Jennings. “While we appreciate that the administration made incremental improvements compared to the proposed RFS rule, unfortunately, today they are choosing to side with those who say ‘no, we can’t. Regrettably, EPA’s final RFS rule protects the old way of doing business by obstructing consumer access to cleaner fuels, stifling competition in the marketplace, and undermining innovation.”
The National Corn Growers Association said while it was pleased to see the EPA revise its proposed volumes, “the fact remains that any reduction in the statutory amount will have a negative impact on our economy, our energy security, and the environment. It is unfortunate that Big Oil’s campaign of misinformation continues to carry weight in the court of public opinion, and in this decision,” NCGA president Chip Bowling said in a statement. “In light of the EPA’s decision, we are evaluating our options. We will fight to protect the rights of farmers and consumers and hold the EPA accountable.”
The Urban Air Initiative called it not disappointing but not surprising. The industry needs to establish markets for ethanol and recognize that the highest value of ethanol is that it is clean, high-octane fuel that can reduce toxic compounds in gasoline and harmful emissions. Instead, UAI president Dave VanderGriend said EPA’s action should be a message to the ethanol industry that it needs to secure its own future and recognize that ethanol’s highest value is as a clean fuel that can provide high octane to reduce the toxic compounds in gasoline while reducing a range of harmful emissions. "This is simply one program,” VanderGriend said. “We can move well beyond that and we will not let EPA and its faulty, inaccurate models define our value and limit our growth.”
The Iowa Renewable Fuels Association executive director Monte Shaw called the announcement a “gut punch” for consumers and farmers. “Given EPA’s stated rationale for these numbers, one of the most successful energy policies in our nation’s history has been put squarely in the stranglehold of the petroleum industry,” Shaw said. “As a result, consumers will see higher prices at the pump and Iowa farmers will likely continue to see commodity prices below the cost of production.”
Todd Sneller, Nebraska Ethanol Board administrator and Clean Fuels Development Coalition chairman, said the rule “essentially caps biofuels at 10 percent of the market,”
“The RFS was, and remains, a foundation to provide a solid base for biofuels to continue to develop,” Sneller said. “All this means is EPA will limit the amount of biofuels they intend to manage under this particular program. Ethanol's high octane and cleaner-burning properties make it an extremely valuable fuel and we expect increasing demand for those reasons.”
The National Biodiesel Board was pleased with the increase in the biodiesel volumes in the RVO. “It is a good rule,” said NBB CEO Joe Jobe in a statement. “It may not be all we had hoped for, but it will go a long way toward getting the U.S. biodiesel industry growing again and reducing our dangerous dependence on fossil fuels.” Under the new RFS rule, biomass-based diesel volumes would grow to 1.9 billion gallons in 2016 and 2 billion gallons in 2017. The biomass-based diesel category—a diesel subset of the overall advanced biofuel category—is made up mostly of biodiesel but also includes renewable diesel, another diesel alternative made from the same feedstocks using a different technology. “The new standards reflect modest but meaningful growth over recent years when the U.S. market has hovered around 1.8 billion gallons annually,” the NBB statement noted. Biodiesel is produced in nearly every state, and has made up the vast majority of advanced biofuel production under the RFS. Advanced biofuels must demonstrate a 50 percent greenhouse gas reduction.
Michael McAdams, speaking for the Advanced Biofuels Association said the group “applauds EPA’s support of next-generation biofuels. Today’s final rule is a step in the right direction that recognizes the importance of growing supplies of advanced and cellulosic biofuels to help provide more sustainable fuels for our future to combat climate issues.” McAdams reiterated the organization’s belief that legislative reform is needed. To strengthen the RFS and expedite the production of advanced biofuels. “. Outdated definitions, cellulosic waivers, as well as overall program uncertainty have created significant barriers to entry for the advanced and cellulosic industry.”
The Biotechnology Industry Organization called the final rule “an unnecessary, unlawful about face for a program that was successfully driving development of cleaner biofuel technologies and reduction of U.S. greenhouse gas emissions. The rule undermines the goals of the statute, and it will continue to undercut investment in advanced and cellulosic biofuels and increase greenhouse gas emissions in the transportation fuel sector.” Brent Erickson, executive vice president of BIO’s Industrial and Environmental Section, called it a severe blow to consumers and the biofuels industry and said the EPA’s actions violate the law. By delaying the EPA created uncertainty and shook investor confidence, resulting in an estimated $13.7 billion investment shortfall in the advanced biofuel sector and this final rule exacerbates the problem.
“As EPA has acknowledged, its delay allowed obligated parties to act as though the law did not exist,” Erickson said. “The delay increased U.S. carbon emissions by millions of tons over the past two years, compared to what could have been achieved with required use of biofuels. As the United States enters negotiations with the rest of the world to limit greenhouse gas emissions, EPA is putting in place an RFS rule that will sacrifice achievable reductions of emissions in the transportation sector.”
Brooke Coleman, excecutive editor of the Advanced Biofuels Business Council, said while the final rule would require oil companies to blend higher amounts of renewable fuel than originally proposed, which could have a positive effect, "it fails to remedy critical RFS waiver issues that are undercutting investment in the low carbon, advanced biofuels. First, the final rule continues to rely on a new reading of the statute to allow for 'distribution waivers,' which now permits EPA to waive the RFS from year-to-year if the oil industry refuses to make arrangements to distribute renewable fuel and comply with the law. Second, the final rule does not make clear how or on what timeline the agency expects to address waivers in the cellulosic biofuel pool, which currently allow the oil industry to avoid buying cellulosic biofuel in favor of cellulosic waiver credits (CWCs) at the end of each compliance year. Both issues should and can be resolved in 2016."
Read the original story: Renewable Fuel Associations Express Mixed Reactions To Final Rule
EPA’s Final Volume Numbers Are Capitulation to the Petroleum Industry
Press Release
MINNEAPOLIS, November 30 - Minnesota Bio-Fuels Association Executive Director Timothy Rudnicki released the following statement on the final targets:
"EPA’s Final Volume Numbers Are Capitulation to the Petroleum Industry.
"The EPA’s failure to uphold the RFS gives petroleum just what it wanted: more heel dragging rather than complying with the law. According to the RFS, at least 15 billion gallons of renewable fuel, such as ethanol, should be used in the fuel transportation market in 2015. Unfortunately, EPA’s final numbers fall short of the legally required amount of renewable biofuels for both 2015 and 2016.
"Congress intended for the RFS to drive change so as to increase our collective energy security while driving down GHG emissions with renewable biofuels like ethanol. Biofuel producers relied upon the law and made significant investments to fulfill its part of the equation. Conversely,petroleum has dragged its feet since the first RFS in 2005 and now the EPA is rewarding noncompliance.
"Biofuels, like ethanol, play a major role in reducing GHG emissions in the transportation sector. Rather than abide by the black letter law of the RFS and maximize the GHG benefits of biofuels, the EPA has chosen to take us backwards."
The EPA finalized the volume requirements and associated percentage standards that apply under the RFS program in calendar years 2014, 2015, and 2016 for cellulosic biofuel, biomass-based diesel, advanced biofuel, and total renewable fuel. EPA also finalized the volume requirement for biomass-based diesel for 2017.
| 2014 | 2015 | 2016 | 2017 | |
|---|---|---|---|---|
| Cellulosic biofuel (million gallons) | 33 | 123 | 230 | n/a |
| Biomass-based diesel (billion gallons) | 1.63 | 1.73 | 1.90 | 2.00 |
| Advanced biofuel (billion gallons) | 2.67 | 2.88 | 3.61 | n/a |
| Renewable fuel (billion gallons) | 16.28 | 16.93 | 18.11 | n/a |
|
(Units for all volumes are ethanol-equivalent, except for biomass-based diesel volumes which are expressed as physical gallons. |
||||
| 2014 | 2015 | 2016 | |
|---|---|---|---|
| Cellulosic biofuel | 0.019% | 0.069% | 0.128% |
| Biomass-based diesel | 1.41% | 1.49% | 1.59% |
| Advanced biofuel | 1.51% | 1.62% | 2.01% |
| Renewable fuel | 9.19% | 9.52% | 10.10% |
The final 2016 standard for advanced biofuel is nearly 1 billion gallons, or 35 percent, higher than the actual 2014 volumes, while the total renewable standard requires growth from 2014 to 2016 of over 1.8 billion gallons of biofuel, or 11% higher than 2014 actual volumes. Biodiesel standards grow steadily over the next several years, increasing every year to reach 2 billion gallons by 2017.
